The costs associated with generating invoices and collecting payments for healthcare related services and products are among the highest of any industry. As an example, on average, the cost of invoicing and processing healthcare payments is typically 15% or more of the dollar amount spent on the healthcare services themselves. In contrast, the cost of invoicing and processing of payments in the retail industry is typically 2% or less.
The vast majority of these invoicing and processing costs in the healthcare industry are concentrated in the 250 billion dollars that healthcare service consumers pay healthcare service providers directly each year, i.e., the out-of-pocket costs the healthcare service consumers must pay beyond the portion that the healthcare insurance providers pay. However, despite the high cost of invoicing and processing healthcare payments, many healthcare service providers actually collect less than 50% of the payments invoiced to healthcare consumers for amounts not covered by healthcare insurance providers. As a result, the healthcare service providers not only incur the onerous invoicing and processing costs, but then, for their efforts, they still have one of the lowest actual collection rates of any industry.
The present situation is difficult enough for many healthcare service providers, however, the current annual out-of-pocket cost to healthcare service consumers of 250 billion dollars in the United States is expected to rise to 420 billion dollars within seven years. This is due, in part, to our aging population and, in part, to many healthcare service consumers being forced to accept healthcare insurance plans with higher co-payments, higher deductibles, and lower coverage ceilings/caps. As a result, many healthcare service providers fear the situation will become untenable as they spend more and more money, time, and resources processing and trying to collect healthcare service payments from healthcare service consumers, with fewer and fewer of those payments actually being collected.
In addition, for many healthcare service consumers understanding the processes, procedures, codes, calculations, and vocabulary associated with healthcare service claims is often difficult and confusing. As a result, in many instances, when the healthcare service consumer receives a bill from a healthcare service provider or an Explanation Of Benefits (EOB) from a healthcare insurance provider, the healthcare service consumer often has no idea how the amount billed was generated and/or determined, how their share of the cost was generated and/or determined, and/or how to proceed if they disagree with either of these amounts. To a large degree this is because the healthcare service bills and/or EOBs are often written in medical terms not discernible by the average healthcare service consumer and/or use codes that are typically completely unfamiliar to the average healthcare service consumer.
In addition, using current healthcare payment systems, any one of the three main parties involved in the payment process, i.e., the healthcare service consumer, the healthcare service provider, and the healthcare insurance provider, often have little or no visibility into the actions and/or data being used and/or generated by the other two parties and there is often no efficient mechanism in place to facilitate communication. This is particularly true for the average healthcare service consumer.
Further complicating the situation is the rather lengthy, and often seemingly redundant, chain of events associated with the processing of a healthcare claim, i.e., payment for a healthcare product and/or service made using, and/or through, a healthcare insurance provider. For instance, in a typical example, a healthcare service consumer covered by a healthcare insurance plan receives a product and/or service from a healthcare service provider on a Date-Of-Service (DOS). Under the terms of their healthcare insurance plan, the healthcare service consumer is often required to make a co-payment, often at the time the healthcare service consumer receives the product and/or service from the healthcare service provider. Typically, a receipt, or other document, is then generated for the co-payment and is typically provided to the healthcare service consumer.
After the healthcare service consumer receives the product and/or service from the healthcare service provider, the healthcare service provider then typically submits an original healthcare service provider claim for payment from the healthcare service consumer's healthcare insurance provider for the product and/or service provided. The healthcare insurance provider then typically reviews the submitted original healthcare service provider claim and, if the healthcare insurance provider has no issues with the submitted original healthcare service provider claim, the healthcare insurance provider pays the healthcare service provider according to the terms and conditions of the healthcare service consumer's healthcare insurance plan. In some cases, the payment made by the healthcare insurance provider according to the terms and conditions of the healthcare service consumer's healthcare insurance plan results in an actual payment made to the healthcare service provider by the healthcare insurance provider that is less than the full amount requested by the healthcare service provider in the original healthcare service provider claim. Herein, the actual payment made by the healthcare insurance provider is referred to as an adjusted healthcare claim payment, which represents payment of the submitted original healthcare service provider claim.
When the adjusted healthcare claim payment is received, the healthcare service provider may accept the adjusted healthcare claim payment, dispute the adjusted healthcare claim payment in whole, or in part, and/or invoice the healthcare service consumer for any difference between the original healthcare service provider claim amount and the adjusted healthcare claim payment, typically minus any co-payment amount already paid by the healthcare service consumer as discussed above.
To further complicate the situation, in conjunction with the adjusted healthcare claim payment, an explanation of benefits (EOB) statement is typically sent to the healthcare service consumer by the healthcare insurance provider. The EOB statement typically includes the notation “THIS IS NOT A BILL,” prominently printed on each page of the EOB statement. The EOB statement typically does not inform the healthcare service consumer whether an issue exists regarding any difference between the original healthcare service provider claim amount and adjusted healthcare claim payment. As such, the healthcare service consumer may be given the false impression that the healthcare service provider has been paid in full for services rendered, and/or that no issues exist with respect to payment for the healthcare product and/or service. However, in the weeks, and even months, following receipt of the EOB statement, the healthcare service consumer may then receive a bill from the healthcare service provider for some, or all, of the remaining balance of the original healthcare service provider claim, which, herein, is referred to as a balance due by a healthcare service consumer.
Using current systems, a healthcare service consumer may wish to obtain more information, investigate, and/or resolve one or more disputes/inconsistencies between: the healthcare service consumer and the healthcare service provider: the healthcare service consumer and the healthcare insurance provider; and/or the healthcare service provider and the healthcare insurance provider. However, using current systems, any attempt to investigate and/or resolve one or more of these disputes/inconsistencies are typically complicated by the length of time that typically elapses between: the healthcare service consumer receiving the healthcare product and/or service; the payment of any required co-payment by the healthcare service consumer; the submission of original healthcare service provider claim to the healthcare insurance provider; the review of the original healthcare service provider claim by the healthcare insurance provider; the adjusted healthcare claim payment made by the healthcare insurance provider to the healthcare service provider; the issuance and/or receipt of the EOB; the healthcare service provider submitting an invoice to the healthcare service consumer; and any payments made by the healthcare service consumer to the healthcare service provider in response to an invoice. The situation is further complicated by apparent duplication of paperwork, often inconsistency of data, and lack of knowledge and/or accountability on the part of one or more of the involved parties as to where in the process an error has occurred, and which of the parties created the error.
Currently, the burden of resolving any of these disputes/inconsistencies is largely left to the healthcare service consumer, who, currently, is the last party in the payment chain. The situation is, of course, particularly problematic when the healthcare service consumer is presented with a bill that is either not expected at all, or that is for an unexpected amount. In these instances, not only does the healthcare service consumer often fail to understand how the bill was generated, and/or why the bill is not for the amount expected, but, in many cases, the healthcare consumer has no idea what party to contact to discuss and/or challenge the bill, much less what department associated with a given party is needed.
For instance, when a bill is not understood and/or a perceived error is discovered, in many cases the healthcare service consumer does not know whether to contact the healthcare insurance provider, his or her healthcare service plan administrator, the healthcare service provider, the healthcare service consumer's employer, or even a collection agency that has contacted the healthcare consumer. For this reason alone, many healthcare service providers, healthcare insurance providers, employers, and/or healthcare service plan administrators lose precious time dealing with phone calls and letters from healthcare service consumers that have been incorrectly directed to their offices. This wasted time is in addition to the time wasted by the healthcare service consumers themselves attempting to determine who to contact, waiting on hold, navigating seemingly endless voicemail menus and automated responses, and then, often as not, being yet again redirected to a different contact to start the process over again.
In addition, even if the healthcare service consumer is able to contact a given party that may, or may not, be the right contact, they still often do not understand the information they have been provided from their bills and/or EOBs and often are unable to identify and/or provide the contacted party with the information regarding the bill that both they and the party will need to proceed. Indeed, the situation can be so confusing for some healthcare service consumers they do not even know how to describe their issues in a way that can allow any party to determine whether they are the proper contact or not.
As a result of the situation described above, not only are many healthcare service consumers currently forced to use their precious “free time” trying to deal with healthcare service disputes, and often only getting more frustration for their efforts, but, as noted, many healthcare service providers, healthcare insurance providers, employers, and/or plan administrators lose precious employee time dealing with phone calls and letters from healthcare service consumers who have incorrectly called their offices. In addition, as noted above, many healthcare service consumers are so confused and/or frustrated by the process, they simply refuse to pay the amount invoiced by the healthcare service provider. Consequently, the current situation is far from ideal for virtually all parties involved in the healthcare industry, and often results in frustrated and angry healthcare service consumers and healthcare service providers.